JP Morgan fined £3m by the FCA for advice failings (May 2013)

- by Kelly Richards
JP Morgan fined £3m by the FCA for advice failings (May 2013) - Cashfloat

When clients and investors back a particular project, they expect the finest by way of information. There are many financial service companies out there who say that they offer the best advice available, but who can you trust? Finding a responsible lender, that gives you the right details when it comes to your finances, is crucial. Consumers stand to lose their assets if they don’t get the right support and help from their bank.

When an acting wealth manager deals with one of their clients, they should give them detailed advice about what to do next. Whenever a person makes an investment, they have to be sure that it is the best possible solution for them. In the same respect, if someone wants to know about short term loans, they should have access to all the relevant information. If a company fails to give adequate advice to consumers, it could mean that they lose out financially.

The regulatory services, FCA, and PRA, are in charge of overseeing any problems in the financial sector. If they believe that a company is committing an act of misconduct, they need to intervene as soon as possible. The government has granted the services the rights to involve themselves in matters of economics. When a case urgently needs attention, the services have the ability to step in and attend to the matter. In theory, that means that if companies fail to adhere to certain rules, they could face serious fines or penalties.

It is crucial that companies educate themselves when it comes to these matters. Through a thorough investigation, it is possible for banks to understand their rights. The independent affordable lender ought to learn about the issue of integrity. In doing so, they can ensure that people have the best possible advice from them.

In the past, there have been cases when large corporations did not do all they could to aid their clients. When a company acts without the proper information, they endanger their finances. That has a knock on effect and means that their clients stand to lose a great deal of money through no fault of theirs. Any advice that companies give to their clients should be thoroughly checked to ensure its accuracy. When financial advisers knowingly give incorrect advice, they are violating the rights people. This instance is something that the regulators hope to prevent in the future. In fact, it is an area of the business world that needs refinement.

There have been a few prominent cases when a company has misled their clients. The lessons we have learned from these events are ever-pertinent. In the past, the regulators have had no other choice but to take severe action against the perpetrators of the cases.

Western Circle is a financial institution providing short term loans in the UK under various trading names. We have employed our compliance team to have a look at famous cases of financial misconduct to make ourselves the best option for our consumers. We will now take a look at the high-profile case of JP Morgan. Back in 2013, the details of this event changed the way in which some think about financial advice.

The infamous case of JP Morgan (2013)

This case is proof that clients don’t have to lose money in order for the FCA to take action. JP Morgan’s international banking group is a world renowned company, serving many wealthy clients. While the company serves a variety of financial sectors, it tends to specialize in aiding retail groups. In fact, the bank aids a large majority of the world’s leading retailers. Over the years, the company has offered affordable cash solutions to these clients. Things became problematic, though when the regulators learned about issues with their records.

The findings of the FCA

The FCA was the first regulator to get involved in this situation. In 2013, the company launched a full investigation into JP Morgan. The findings of the research showed that the banking group was at fault. In particular, it was clear that the clients’ documents were not up to date. That was a major failing on the part of the bank, and one which could have caused financial damage. The documents did not have the right details about what investment opportunities were available. Aside from that, the computing processes were old-fashioned. A combination of these factors led the regulators to believe that the bank was not providing the best level of service.

The FCA investigation proved that the officials from JP Morgan had neglected their clients to a serious level. The results of their research hindered the reputation of the banking group. It was then paramount that the banking advisers took note of this instance. After careful consideration, they chose to change their practices.

Personal accountability

The culpability for this troubling situation lies directly with the banking company. JP Morgan had not equipped themselves with the right level of expertise to serve their customers to a high standard. A responsible lender in their situation would have done their utmost to protect the finances of their clients. The evidence was conclusive in proving that the bank had misled customers over a two-year period. While few people understand personal accountability in this situation, the regulators are experts. The fact that JP Morgan failed on any level meant that they were accountable for the consequences.

Fines and penalties

After a thorough investigation, the FCA compiled all the information they needed to issue a hefty fine. In May 2013, the regulators gave JP Morgan a £3 million fine. Throughout the process, the bank cooperated with the officials. In an official press release, they sought to highlight the fact that there was no detriment to their customers.


This case is now infamous in the financial sector. It set an important milestone in the field. Since the fine, it has become clear that there does not need to be any financial loss for the regulators to take action. In fact, if they can see that there is a chance of monetary issues, they will intervene at the earliest possible point. In the future, the PRA and FCA will take note of the lessons this case taught them. That way, they hope to work towards a more financially secure future for everybody.

About The Author
Kelly Richards
Kelly Richards is the founder of the Cashfloat blog and has been working tirelessly to produce interesting and informative articles for UK consumers since the blog's creation. Kelly's passion is travelling. She loves her job because she can do it from anywhere in the world! Whether inspiration hits her while sitting on the balcony of a French B&B, or whether she is struck with an idea in a roadside cafe in Moscow, she will always make sure that the idea comes to fruition. Kelly's insights come from her knowledge gained while completing her degree in Economics and Finance as well as from the people she meets around the world. Her motto is: Everyone you meet has something valuable to teach you, so meet as many people as you can!
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